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year 1984, to distribute to each shareholder cash equal to the
amount which each shareholder must report as ordinary income on
his Federal income tax return for that year because of the
Bengals' S corporation election.
6. 1983 Controlling Shareholder S Corporation Agreement
The controlling shareholder S corporation agreement, dated
May 16, 1983, was signed by the Bengals, Paul Brown, Sawyer, Mike
and Peter Brown, and Knowlton. It provided: (a) Each
shareholder would execute an S corporation election for the
Bengals' tax year beginning March 1, 1983; (b) unless Paul Brown,
Knowlton, or Sawyer died, or unless it is necessary to make
economically feasible the acquisition of their shares if any of
them die, the S corporation election was irrevocable for 10
years, and no shareholder could dispose of the shares in a manner
that would disqualify the election for 15 years; (c) the total
amount distributed to each shareholder for the year would be not
less than the amount which each shareholder must report on his
Federal income tax return for that year; and (d) as long as the
Bengals were an S corporation, the salaries of Paul, Mike and
Peter Brown were limited to the sum of several specified amounts
unless otherwise agreed to by Knowlton and Sawyer.
The controlling shareholder S corporation agreement also
provided that: (a) Knowlton, Charles D. Lindberg, and Robert
Fite were to be members of the Bengals' board of directors as
long as Knowlton's stock remained in the voting trust; (b) the
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